Bitcoin Bears in Control? Record Low Funding Rates on Binance Signal Market Shift
16 Agosto 2024 - 6:30PM
NEWSBTC
According to the latest data from CryptoQuant, bears might be in
control of Bitcoin given the asset’s funding rates reaching a
negative level across all crypto exchanges, including Binance. For
context, funding rates are essential in perpetual futures markets
to ensure the price of perpetual contracts aligns closely with the
spot market. These rates can be either positive or negative,
depending on market conditions. A positive funding rate implies
that long position holders pay shorts, typically signaling bullish
sentiment. Conversely, negative funding rates suggest shorts pay
longs, indicating bearish sentiment. Related Reading: Analyst
Warns: Bitcoin Nears Dangerous Territory – $40,000 On The Horizon?
Funding Rates Signal Market Shift According to EgyHash, the analyst
who reported this significant rise in funding rates on the
CryptoQuant QuickTake platform, Bitcoin’s funding rates on Binance
have dipped to unprecedented negative levels that have not been
seen ever since October 2023. The analyst revealed that this
prolonged negativity in funding rates, lasting over three
consecutive days, highlights an intensifying “bearish sentiment”
among traders. Notably, the significance of these negative rates is
compounded by Binance’s substantial share in the open interest (OI)
across crypto exchanges. This dominant position suggests that the
sentiments reflected in Binance’s funding rates could presage
broader market movements. $BTC funding rates have reached the
highest level of negativity YTD on Binance “Binance has the largest
share of open interest (OI), this could indicate a bearish market
sentiment for the short term.” – By @EgyHashX Read more
👇https://t.co/lGCUSic8kl pic.twitter.com/bfCPAYy1Z8 —
CryptoQuant.com (@cryptoquant_com) August 16, 2024 When funding
rates remain negative, it generally points to an expectation among
traders that prices may decline further. This bearish outlook might
encourage selling, potentially leading to a self-fulfilling
prophecy as downward price movements encourage more shorts. The
analyst particularly noted: This means that short positions are now
dominating the perpetual market. Taking this into consideration,
and as Binance has the largest share of open interest (OI), this
could indicate a bearish market sentiment for the short term.
However, there is a catch. While this negative change in funding
rate may spell a plunge for BTC, extremely negative funding rates
can sometimes precede a market reversal if shorts begin to cover
their positions, leading to a rapid price surge. Bitcoin Market
Performance So far, Bitcoin has been unable to reclaim its
psychological level of $60,000 following a plunge below it on
August 14. Instead, the asset has continued to range between
$59,000 to $56,000 region over the past few days. Related Reading:
Bitcoin Observes Pullback To $58,000: Is This The Cause? Notably,
the past 24 hours are no different from the continuous
consolidation. Over this period, Bitcoin has declined by 2.6%, with
a current trading price of $58,015. Featured image created with
DALL-E, Chart from TradingView
Bitcoin (COIN:BTCUSD)
Gráfica de Acción Histórica
De Jul 2024 a Ago 2024
Bitcoin (COIN:BTCUSD)
Gráfica de Acción Histórica
De Ago 2023 a Ago 2024